Correlation Between Ocean Harvest and Albion Technology

Can any of the company-specific risk be diversified away by investing in both Ocean Harvest and Albion Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ocean Harvest and Albion Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ocean Harvest Technology and Albion Technology General, you can compare the effects of market volatilities on Ocean Harvest and Albion Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ocean Harvest with a short position of Albion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Harvest and Albion Technology.

Diversification Opportunities for Ocean Harvest and Albion Technology

0.24

Correlation Coefficient

Ocean Harvest  Albion Technology

Modest diversification

The 3 months correlation between Ocean and Albion is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Harvest Technology and Albion Technology General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Technology General and Ocean Harvest is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ocean Harvest Technology are associated (or correlated) with Albion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Technology General has no effect on the direction of Ocean Harvest i.e., Ocean Harvest and Albion Technology go up and down completely randomly.

Pair Corralation between Ocean Harvest and Albion Technology

Assuming the 90 days trading horizon Ocean Harvest Technology is expected to under-perform the Albion Technology. But the stock apears to be less risky and, when comparing its historical volatility, Ocean Harvest Technology is 1.35 times less risky than Albion Technology. The stock trades about -0.22 of its potential returns per unit of risk. The Albion Technology General is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  7,000  in Albion Technology General on September 24, 2024 and sell it today you would lose (200.00) from holding Albion Technology General or give up 2.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ocean Harvest Technology  vs.  Albion Technology General

Ocean Harvest Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocean Harvest Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Albion Technology General

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Albion Technology General has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Albion Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ocean Harvest and Albion Technology

The main advantage of trading using opposite Ocean Harvest and Albion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Harvest position performs unexpectedly, Albion Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Albion Technology will offset losses from the drop in Albion Technology's long position.

The idea behind Ocean Harvest Technology and Albion Technology General pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.